April 2014

Time Warner Cable chief defends merger plan with Comcast

Time Warner Cable’s chief executive defended the cable operator’s proposed merger with industry leader Comcast as the “best way to maximize value for shareholders.”

His comments come after the value of the all-stock deal has dropped to less than $40 billion from $45.2 billion since it was announced, following declines in Comcast’s stock price. Rob Marcus, Time Warner Cable’s chief executive, said that the combination of the two largest cable operators in the US should create the most value in the long term, pointing to the fact that Time Warner Cable shareholders will own about 23 per cent of the combined company. Marcus noted that the regulatory approval for the tie-up, which would control about a third of the US pay-TV and broadband markets, was going as planned and that the integration process between the two companies was going better than expected.

Comcast-Verizon Battle Intensifies as US Hits Peak TV

Comcast added TV subscribers in the first quarter, its second consecutive gain after years of losing market share to phone companies. And Time Warner Cable, the target of its $45 billion takeover bid, reduced customer losses to the fewest in four years. Meanwhile, AT&T fell short of analysts’ estimates for TV customer gains and Verizon’s FiOS TV had its worst quarter ever.

Cable companies are matching competitors’ pricing and unveiling new technology, like Comcast’s X1 set-top box, to keep customers in the fold. The battle among cable, phone and satellite providers is growing more intense as the pool of potential customers shrinks. About 97 percent of U.S. households already subscribe to pay-TV, and younger viewers are increasingly shunning those bills and instead watching video online.

Netflix to become real TV and get its own ‘cable channel’

Netflix has reached an agreement with three cable companies that, for the first time, will let US subscribers watch the streaming video service as though it were an ordinary cable channel. The deal will add Netflix as an app to certain set-top boxes nationwide on RCN, Grande Communications and Atlantic Broadband.

It gives subscribers of those companies the ability to watch all the same Netflix content they would otherwise be able to get on their PCs, tablets and phones. Altogether, the agreement covers as many as 500,000 of the cable firms' existing subscribers -- though that figure could grow as more customers sign up for the offering. The offer is limited to those who are both a customer of the three cable companies and a subscriber to Netflix. In addition, the technology requires a cable-provided TiVo box. Although consumers can currently buy TiVos from retail stores that come with the Netflix app, until now cable-provided boxes lacked the Netflix functionality. In order to make the deal possible, Netflix said it had to negotiate with some of its content partners to allow streaming on cable boxes. All Americans with service from one of the three cable companies will be eligible for the offering beginning April 28, company officials said.

Comcast Response to Netflix

Netflix’s argument is a House of Cards. But there is no need for us to engage in a point-counterpoint with Netflix to demonstrate the continued distortions and inaccuracies on which it relies.

As we and other industry observers have already noted, Netflix’s decision to reroute its Internet traffic was all about improving Netflix’s business model. While it’s understandable for Netflix to try to make all Internet users pay for its costs of doing business (as opposed to just their customers), the company should at least be honest about its cost-shifting strategy. Comcast has a multiplicity of other agreements just like the one Netflix approached us to negotiate, and so has every other Internet service provider for the last two decades. And those agreements have not harmed consumers or increased costs for content providers – if anything, they have decreased the costs those providers would have paid to others. As at least one independent commentator has pointed out, it was not Comcast that was creating viewability issues for Netflix customers, it was Netflix’s commercial transit decisions that created these issues. No ISP in the country has been a stronger supporter of the Open Internet than Comcast – and we remain committed both to providing our customers with a free and open Internet and to supporting appropriate FCC rules to ensure that consumers’ access to the Internet is protected in a legally enforceable way.

Google may offer Wi-Fi for cities with its Google Fiber

Google is considering deploying Wi-Fi networks in towns and cities covered by its Google Fiber high-speed Internet service.

The disclosure is made in a document Google is circulating to 34 cities that are the next candidates to receive Google Fiber in 2015. Specific details of the Wi-Fi plan are not included in the document, which was seen by IDG News Service, but Google says it will be "discussing our Wi-Fi plans and related requirements with your city as we move forward with your city during this planning process." If the plan goes ahead, it would be a further step by Google toward competition with traditional telecom carriers. For citizens of the cities involved, it could mean increased reliance on services by the dominant Internet company.

Microsoft Completes Nokia Phone-Unit Purchase in Push to Mobile

Microsoft completed its deal to take over Nokia Oyj’s phone business, ending a seven-month wait to renew its assault on the mobile market and leaving the Finnish company seeking growth in wireless networks.

The final price may be “slightly higher” than the 5.44 billion euros ($7.5 billion) announced in September. About 30,000 employees are transferring to Microsoft as part of the transaction, which was delayed amid regulatory scrutiny. Microsoft, the world’s largest software maker, is gaining a device business that it’ll bet on to catch up with Apple and Google in the tablet and mobile-phone markets. Nokia is left seeking a turnaround for its network-equipment business and is said to consider the division’s head, Rajeev Suri, as chief executive officer to challenge rivals such as Ericsson AB. The purchase of the unprofitable division makes Microsoft the world’s second-largest maker of mobile phones with about 14 percent of the market.

Mexican law would liberalize telecoms, but critics spy censorship

Mexicans are protesting a telecommunications bill they say amounts to government censorship.

Mexican President Enrique Peña Nieto proposed sweeping constitutional reforms in 2013, tackling topics from ending the state oil monopoly to increasing competition in the telecommunications sector. The initial telecom proposal was lauded for its aim to open the market to greater foreign investment, create new all-access TV stations, and implement stricter competition rules in order to offer consumers better prices and access to phone, Internet, and TV services.

In March, President Peña Nieto sent a 500-page telecom bill to the Senate that fleshed out the so-called secondary legislation that determines how the reforms will actually play out, but some of the bill’s provisions are sparking concerns. Opponents say the proposed law would allow the government to block cell phone signals during protests, censor websites, and track cell phone communications in the interest of national security. It’s a sensitive topic, as Peña Nieto’s Institutional Revolutionary Party (PRI) controlled Mexico for 71 straight years until 2000, and some fear these provisions could signal a step back toward a more authoritarian style of government.

Saudi Arabia Plans to Regulate Local YouTube Content

Saudi Arabia is planning tighter regulation of video content produced in the country for YouTube after an explosion of news, satire and comedy has made the kingdom one of the biggest per-capita global consumers of Google's video platform.

Viewers in Saudi Arabia watch three times as much YouTube as their peers in the US, according to Google, largely because the traditionally government-backed mass media hasn't produced enough content suited to the country's large population of young people. An array of Arabic shows are produced in Saudi Arabia by online content creators that have, until now, been given a measure of freedom compared with the traditional media in the conservative Islamic kingdom. But YouTube's popularity has brought it under the scrutiny of Saudi authorities, who plan to regulate all forms of audiovisual media, a move that could stifle creativity among creators who have increasingly pushed the boundaries of satire in the Middle East. The General Commission for Audiovisual Media will monitor the quality and quantity of content produced in Saudi Arabia on platforms such as YouTube via a code that will include guidelines on alcohol, tobacco, nudity and sexual acts, said Riyadh Najm, the commission's president. It will also promote private-sector-led investment in the media industry.

Google braced for French tax demand

Google faces a tax demand from the French government that could reach into hundreds of millions of euros.

A regulatory filing confirmed reports earlier in the year that the French authorities objected to Google’s European tax structure, which sees the search and online advertising company recognize revenues through an Irish subsidiary. “In March 2014, we received a tax assessment from the French tax authorities,” Google said. “We believe an adequate provision has been made and it is more likely than not that our tax position will be sustained. However, it is reasonably possible that resolution with the French tax authorities could result in an adjustment to our tax position.” French magazine Le Point reported in February that the sum, relating to an investigation which began in 2011, could total between €500 million and €1 billion.

Benton

Search